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ONGC-RIL-BG to sell PMT gas to GAIL

ONGC-Reliance-BG will sell 5.4 million cubic meters per day of gas from Panna/Mukta and Tapti (PMT) fields to GAIL.

india Updated: Mar 13, 2006 14:48 IST

ONGC-Reliance-BG will sell 5.4 million cubic meters per day of gas from Panna/Mukta and Tapti (PMT) fields to GAIL at $4.75 per million British thermal unit (mBtu), about a dollar more than the present price.

This was agreed at a meeting of the consortium of Oil and Natural Gas Corp, BG Group of UK and Reliance Industries and gas offtaker GAIL (India) Ltd, called by Petroleum Secretary MS Srinivasan on Monday.

"The consortium will continue selling 5.4 mmmscmd of gas from the fields to GAIL for two more years beyond the expiry of current contract on March 31, 2006," a source said.

GAIL, which currently pays USD 3.86 per mBtu to OGC-BG-RIL, would have paid $5.73 per mBtu for the PMT gas if the formula prescribed in the field contract was implemented. However, Srinivasan urged the consortium to sell the gas at the maximum price it was getting from selling the remaining 4.8 mmscmd of PMT gas.

Last week, ONGC had struck a deal with Torrent Power of Gujarat for sale of 1.5 mmscmd of PMT gas at $4.75 per mBtu and this was set as the benchmark price, sources said.

ONGC-BG-RIL had asked Petroleum Ministry for permission to sell the entire gas prouced in PMT fields directly to customers at market price from April 2006.

Currently, the joint operators sell about six mmscmd of gas to GAIL at controlled price of $3.86 per mBtu or Rs 7,046 per thousand cubic meters (exclusive of sales tax). They market the remaining 4.8 mmscmd of gas from the fields at 4.08 dollars per mBtu (or Rs 7448 per thousand cubic meters).

The government has asked ONGC-BG-RIL to supply six mmscmd of gas from the fields to GAIL for one year from April 1, 2005 so that power and fertilizer companies on HBJ pipeline are not affected.

First Published: Mar 13, 2006 13:58 IST